The Trump administration announced Monday the creation of a $1.776 billion Justice Department fund to compensate people who claim they were unfairly targeted by the Biden administration, part of a deal that ended President Donald Trump's $10 billion lawsuit against the Internal Revenue Service over the leak of his tax returns.
The Justice Department described the new pool of money as an "Anti-Weaponization Fund," saying it would provide a way for people who allege they were harmed by government "weaponization and lawfare" to seek compensation. Trump reportedly agreed to dismiss the IRS lawsuit in exchange for the fund, which will be used to settle legal claims by people who say they were politically targeted by the federal government.
"The machinery of government should never be weaponized against any American, and it is this Department's intention to make right the wrongs that were previously done while ensuring this never happens again," Acting Attorney General Todd Blanche said in a statement. Blanche, a former personal lawyer for Trump, will appoint four of the five commissioners who will decide the merits of claims.
The settlement closes a case Trump filed in January against the IRS and the Treasury Department. Trump, Donald Trump Jr., Eric Trump, and the Trump Organization alleged that the government failed to safeguard confidential tax records later leaked to the media. Former IRS contractor Charles Littlejohn pleaded guilty in 2023 to disclosing tax records and was sentenced to five years in prison.
The leaked records became the basis for major reporting on Trump's finances, including a 2020 New York Times investigation that found he paid $750 in federal income taxes the year he entered the White House and no federal income tax in some other years. Trump's lawsuit claimed the leak caused reputational and financial harm, public embarrassment, and damage to the plaintiffs' business reputation.
The fund immediately drew criticism from Democrats and watchdog groups, who described it as an extraordinary use of taxpayer money to benefit Trump allies. Rep. Jamie Raskin, the top Democrat on the House Judiciary Committee, called the arrangement a "slush fund" for Trump loyalists and said it could benefit people charged in connection with the Jan. 6, 2021, attack on the U.S. Capitol.
The Justice Department has said there are no partisan requirements to file a claim. Still, Reuters noted that the terms "weaponization" and "lawfare" have been repeatedly used by Trump and his allies to describe criminal investigations involving the president.
The case has raised questions because Trump, as president, was suing agencies inside the executive branch he controls. U.S. District Judge Kathleen Williams recently ordered Trump's lawyers and the Justice Department to explain why the case should proceed, saying the court needed to determine whether the parties were truly adverse.
The dispute adds a new chapter to Trump's long-running argument that the Justice Department and other federal agencies were used against him and his supporters during the Biden administration. Former Attorney General Merrick Garland repeatedly denied that the department acted for political reasons, saying its decisions were guided by facts, evidence, and the law.
